New Delhi: Oil & Natural Gas, India's biggest energy explorer, plans to spend a record $5 billion (Dh18.4 billion) to develop gas fields to boost output by almost 60 per cent in six years, two people with direct knowledge of the matter said.

The New Delhi-based explorer sought permission from the country's oil and gas regulator on July 16 to invest the funds in nine natural gas discoveries off India's east coast to produce 35 million cubic metres a day by 2016, one person said, declining to be identified before the Directorate General of Hydrocarbons approves the plan.

The amount is triple ONGC's planned spending on its largest oil field and follows the government's decision in May to double the price at which the explorer sells gas.

India is ramping up gas output at the fastest pace in the world, according to BP's 2010 Statistical Review of World Energy, after companies including Reliance Industries discovered new fields.

"ONGC has been discovering new reserves for a while but the concern is being able to convert them to production," said Rohit Ahuja, a Mumbai-based analyst with Centrum Broking in Mumbai.

Good discoveries

"The company is looking to address this with the very good discoveries they have in the east coast."

The producer of almost 25 per cent of the crude oil used by India, Asia's third-largest energy-consuming nation, is starting new fields at home as output declined at aging areas off the west coast.

Reserves added in fields operated by ONGC in the year ended March was the equivalent of 82.98 million metric tonnes, the highest in the past 20 years, the explorer said April 26. ONGC made 21 discoveries in the year, according to a May 28 statement on its website.

Gains

The shares fell 0.4 per cent to close at Rs1,255.25 in Mumbai trading. The stock has gained 6.4 per cent this year compared with the 3.2 per cent increase in the benchmark Sensitive Index of the Bombay Stock Exchange.

The state-run explorer produced 61.6 million cubic metres a day of gas from its fields in India in the year ended March 30, according to data on the oil ministry's website.

ONGC plans to produce gas from the discoveries for 10 years, the person said.

D. K. Pande, director of exploration at ONGC, and S. K. Srivastava, the director general of hydrocarbons, couldn't immediately be reached for comment.